They say that as consumers, we’re voting with our wallets. Voting for politicians on the other hand, it could be said, is voting for our wallets.
As a green blooded libertarian, my natural disposition is to keep my wallet as closely guarded as possible at all times. But with voting already started and election fervour in full tilt, I thought I’d embrace the spirit of open mindedness and invite all of the political parties on to the New Zealand Everyday Investor show to talk about wealth.
How are the parties going to help me build wealth, without making me sell my soul in the process?
James Shaw from the Greens:
Here’s a party willing to address the elephant in the room (and the mouse next to it). A tiny portion of New Zealanders own far more than what they truly need to live off of, while their neighbours are struggling to rub a couple of dollars together to make ends meet. Whichever way you swing, you’ll be able to agree this is fundamentally problematic.
In New Zealand we tax income (fruit), but we don’t generally tax the tree (wealth). Sure, you could redefine income to include capital gains or you could call it what it is – a wealth tax. A tax that persists well, until there’s no more wealth to tax basically. How’s this for creating incentives? Sure, it’s potentially ‘fair’ and it might drive better short term outcomes for our country’s worst off, but who really wants to succeed in a country when you’re punished for building stable wealth?
David Seymour from Act:
An intellectual who isn’t a lefty – how refreshing! According to Seymour, we ‘should always vote for less government by default.’ This backs up a core belief within the ACT Party that whoever we have in charge, the government will be inefficient. If ACT had it their way, the government would be less than what we see today, providing only core services, so everyday people would have more money in their back pockets to make their own decisions with.
COVID aside, ACT’s proposed flat tax appeals to many who have half a brain and understand business – a greater incentive to succeed raises the tide and floats all boats. In NZ, my take on this is that efficiency shouldn’t be an optional extra, it should be absolutely a necessity.
Paul Goldsmith from National Party:
Perhaps not so good on excel, Paul is pretty awesome on tax history. Having written a book on the subject New Zealand tax, Goldsmith has some real credibility when he says “you cannot tax yourself out of a recession.” Considering the importance of getting it right in this pivotal time in New Zealand economic history, it’ll be fascinating to see how many pages this particular chapter will get in a rewrite of Goldsmith’s book.
I think we over-venerate politicians and sports people in NZ, at the risk of forgetting the importance of sound economic policy or even the ethos that drives it. Is the election really a popularity contest – or a rational response to the policies they put forward? In this very moment in time, it seems prudent to cast a vote based on what’s best for NZ, to drive us through some pretty gnarly potholes due to Covid. Is now the best time to run the country through an egalitarian framework, or more like a business – if so, which party (not politician), is best positioned to do this?
I didn’t manage to get any time with Labour, but like the rest of the country, I’ve seen plenty of them throughout the past six months. Their tax policy, for the common New Zealander, feels pretty ‘same same’ to National to be honest, despite their motivation to tax those on higher incomes. So is keeping the status quo going to cut it for an economy desperately pushing for a rebound?
The great thing about going through tough times with someone you trusted once, is that it gives you confidence you can trust them again. But that assumption might just be a trope of human behaviour. A friend that helped you through a difficult period in your life isn’t always going to be the best resource to draw upon for the next crisis. I think there’s a danger in assuming that because we’ve been competently led through one disaster, that they’re the only real choice to lead us through the aftermath.
Labour have proven themselves to be great communicators and impressive leaders. The next three years are going to need a lot more than lip service and working-groups though, we need to put rhetoric to the side and focus on the policies and values driving the team we’re voting for.
So, at this election it seems we have to choose what’s good for us as individuals, or what’s good for NZ as a whole. Is pumping up tax really the best device to redistribute wealth, or is it just appealing to those with a strong moral compass and limited agency? Instead of allowing our fancies to be tickled by those capable of winning a popularity contest, I think there’s some value in putting some original thought into this one.
Working with everyday with people looking to create ‘options’ for themselves and their families, I feel that higher taxes only bluntens the incentive to succeed. I’m also conscious though that the government has a lot of important things to spend on right now.
Whatever way you decide to vote this election I’d encourage you not to be afraid of voting for your wallet, and your long-term wealth in mind.